Special Fund to Boost Last-Mile Financial Inclusion of Small Business Entrepreneurs in India
WASHINGTON, D.C.–(BUSINESS WIRE)–#AI–Kinara Capital, India’s leading socially responsible small business finance company, today announced securing USD $10 million in debt financing from IndusInd Bank, with 100% guaranty from the U.S. International Development Finance Corporation (DFC). This unique three-way partnership unites the organizations’ shared goals to promote entrepreneurship, financial inclusion and job creation. The five-year investment from IndusInd’s Impact Lending division with backing from DFC will be utilized by Kinara Capital to stimulate small business growth across the manufacturing, trading, and services sectors in India. Kinara Capital is at the forefront of driving financial inclusion and has disbursed USD$271 million across 56,000+ collateral-free loans to small business entrepreneurs.
“Our partnership with IndusInd and DFC underscores our shared commitment to ease the credit hurdle faced by most small business entrepreneurs in India,” said Hardika Shah, Founder & CEO, Kinara Capital. “Small businesses galvanize India’s economy with income generation and job creation and there is an ever increasing demand for businesses to rebuild and grow this year. This investment from IndusInd Bank and DFC will accelerate financial inclusion of small businesses, thereby invigorating local economies.”
Kinara brings a wide variety of small businesses into the financial inclusion fold, from general retail shops to distributors and wholesalers to small-scale manufacturing companies. About 90% of Kinara’s customer base is new to credit, receiving its first-ever business loan from the company. The social impact of Kinara’s financial inclusion work has led to an incremental income generation of USD$100 million for small business entrepreneurs, and led to more than 250,000 jobs created or sustained across 90+ urban, peri-urban and rural locations in India.
In offering both digital and doorstep customer service options, small businesses appreciate the convenience of Kinara’s fast 24-hour direct disbursements and flexible payment options on 400+ apps, such as Google Pay. Use of Artificial Intelligence and Machine Learning (AI/ML) based data-driven automated credit decisioning enables Kinara to lend confidently without relying on property collateral or credit scores for risk assessment.
“We hold the organizations that we fund to a very high standard and Kinara Capital is a role model when it comes to last-mile delivery,” said Loren Rodwin, Managing Director, Social Enterprise Finance Team, Office of Development Credit at DFC. “Commitment towards financial inclusion from Kinara Capital has made it possible for us to collaboratively help India’s small business entrepreneurs. We are motivated by the high potential and the high prospects of the diverse MSME sector in India and proud to partner with both IndusInd and Kinara Capital.”
“We are glad to have associated with DFC to support a strong impact creating entity, Kinara Capital, in their growth trajectory,” said Roopa Satish, Head, Corporate & Investment Banking, CSR & Sustainable Banking, IndusInd Bank. “The guaranty from DFC eliminates foreign exchange rate fluctuation risk from the balance sheet of Kinara and it has become an important tool to mobilize debt funding for impact space companies.”
India’s top trading partner for the second consecutive year is the USA, with bilateral trade reaching USD$89 billion in FY20 between the two countries. India is the world’s fastest-growing major economy with 60 million micro-small-medium-enterprises (MSMEs). Commonly referred to as the backbone of the economy, the MSMEs contribute to nearly 30% of India’s GDP and 45% of its exports. Yet, access to formal capital is a key challenge faced by many small business entrepreneurs who often lack property collateral. Kinara Capital addresses this credit gap by providing asset purchase and working capital collateral-free business loans in the range of USD$2,000-$30,000.
About Kinara Capital
Kinara Capital is a socially responsible small business finance company propelling financial inclusion of small business entrepreneurs with fast & flexible collateral-free business loans. Launched in 2011 by a visionary Indian-American, Hardika Shah is the Founder & CEO of Kinara Capital. The company boasts a women-majority management team and is globally recognized for its innovations. The IFC/World Bank named Kinara Capital as ‘Bank of the Year-Asia’ 2019 and Financial Times ranked it among the Top 100 High-Growth Companies in Asia-Pacific. Headquartered in Bangalore, the company operates 110 branches in 90+ cities in India. Kinara Capital is recognized as a Systemically Important NBFC by the Reserve Bank of India (RBI) and is a debt listed entity on the Bombay Stock Exchange (BSE). Click here for more information kinaracapital.com and follow us on Twitter at @KinaraCapital
About U.S. International Development Finance Corporation (DFC)
U.S. International Development Finance Corporation (DFC) is America’s development bank. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. DFC invests across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to standards and respect the environment, human rights, and worker rights.
About IndusInd Bank
IndusInd Bank, which commenced operations in 1994, caters to the needs of both consumer and corporate customers. Its technology platform supports multi-channel delivery capabilities. As on September 30, 2020, IndusInd Bank has 1910 Branches/ Banking Outlet and 2785 ATMs spread across 751 geographical locations of the country. The Bank also has representative offices in London, Dubai and Abu Dhabi. The Bank believes in driving its business through technology. It enjoys clearing bank status for both major stock exchanges – BSE and NSE – and major commodity exchanges in the country, including MCX, NCDEX and NMCE. IndusInd Bank was included in the NIFTY 50 benchmark index on April 1, 2013.
This press release may contain projections and other forward-looking statements regarding future events or future financial performance. These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. Given business risks and uncertainties, undue reliance on these forward-looking statements should not be placed. Actual events or results may differ materially from those contained in the projections or forward-looking statements.
Khyati Shah, Kinara Capital | [email protected] | (+1) 650-823-7477
Martha Feingold, Aircover PR for Kinara Capital | [email protected] | (+1) 415-225-2485